Report Generator for Allowing Financial Entity to Monitor Securities Class Action Lawsuits and Potential Monetary Claims Resulting Therefrom

ABSTRACT

Abstract of the Disclosure 
         
   Reports are automatically created that allow a financial entity to review and track potential monetary claims resulting from securities class action lawsuits for securities purchased or acquired by the financial entity.  To create the reports, a first database of transaction activity for the financial entity is accessed.  The transaction activity includes an identification of each security purchased or acquired, and the date of each purchase or acquisition.  A second database of securities class action lawsuits is accessed.  The second database includes for each lawsuit an identification of all securities associated with the class action lawsuit, and the class period of the lawsuit.  The transaction activity of the financial entity is automatically compared with the securities class action lawsuits in the second database, and any securities purchased or acquired by the financial entity during the class period that are associated with an entered securities class action lawsuit are identified.  The identified securities may provide a potential monetary claim for the financial entity.  A report is then automatically created of at least the lawsuits that may provide a potential monetary claim for the financial entity based on the transaction activity of the financial entity.  The report also includes estimated market loss and eligible loss information, as well as any actions recommended to be taken by the financial entity regarding the lawsuits.

Detailed Description of the Invention Copyright Statement

[0001] Portions of the documentation in this patent document containmaterial that is subject to copyright protection. The copyright ownerhas no objection to the facsimile reproduction by anyone of the patentdocument or the patent disclosure as it appears in the Patent andTrademark Office file or records, but otherwise reserves all copyrightrights whatsoever.

Appendix Data

[0002] Compact Disc appendix.txt This patent application includes anAppendix on one compact disc having a file named appendix.txt, createdon August 8, 2003, and having a size of 142,054 bytes. This compact discis incorporated by reference into the present patent application.

Background of Invention

[0003] Many financial entities, such as investment companies andpublicly and privately held investment funds have a fiduciaryresponsibility to manage their assets for the exclusive benefit of theirshareholders or beneficiaries. One aspect of this duty is to take allreasonable steps to collect any money that the financial entity may beentitled to for securities that were purchased or acquired by thefinancial entity and that suffered a "market loss" which was determinedto be compensable in a securities class action lawsuit (also, referredto as a "securities fraud class action").

[0004] When a securities class action lawsuit is filed or concluded, noparty in the lawsuit is required to identify all of the financialentities that suffered a market loss. When a securities class actionlawsuit is concluded, a "settlement" notice is issued. Parties whobelieve that they are entitled to an award under the terms of thesettlement notice (i.e., class members) must timely file a "proof ofclaim" with a claims administrator to receive monies from thesettlement. The burden falls on the financial entities that suffered theloss to identify their eligibility to participate in the lawsuit and toreceive a recovery award.

[0005] Hundreds of securities class action lawsuits are filed everyyear. Since securities class action lawsuits are typically pending formany years, there may be thousands of such lawsuits pending at any time.A large financial entity such as a public pension fund may holdthousands of securities at any one time, and may trade thousands ofsecurities each year. To be eligible for a monetary award from asecurities class action lawsuit, the security typically must have beenpurchased during the "class period" specified in the lawsuit. Sometimes,eligibility exists if the security was acquired (by other than apurchase) or sold during the class period.

[0006] It is a complex and monumental task for financial entities tomonitor all significant securities class action lawsuits to (a)determine when a potential market loss exists for security that waspurchased or acquired by the financial entity during the class period,(b) estimate the amount of loss, and (c) determine whether it is prudentto take measures to try to recover part of the loss. Accordingly, manyfinancial entities take no measures to identify and seek recoveriesdespite the fiduciary responsibility to do so.

[0007] In instances where a financial entity suffered a significantestimated market loss, it may be prudent for the financial entity toplay an active role in the lawsuit, such as by being a lead plaintiff orby filing an individual action. However, this decision will be forfeitedif the financial entity fails to identify their estimated market lossearly on in the lawsuit. If the estimated market loss only justifies apassive role for the financial entity, it is still necessary for thefinancial entity to monitor the lawsuit if a recovery is desired.

[0008] An automated management tool that allows a financial entity toreceive reports which evaluate their position with respect to any givensecurities class action lawsuit and which track any identified potentialmarket loss through the conclusion of a lawsuit would allow financialentities to more easily fulfill their fiduciary responsibility withrespect to securities class action lawsuits without unduly burdening thefinancial entities with administrative tasks. The present inventionfulfills such a need.

Summary of Invention

[0009] The present invention provides a system and method thatautomatically creates reports to allow a financial entity to review andtrack potential monetary claims resulting from securities class actionlawsuits for securities purchased or acquired by the financial entity.To create the reports, a first database of transaction activity for thefinancial entity is accessed. The transaction activity includes anidentification of each security purchased or acquired, and the date ofeach purchase or acquisition. A second database of securities classaction lawsuits is accessed. The second database includes for eachlawsuit an identification of all securities associated with the classaction lawsuit, and the class period of the lawsuit. The transactionactivity of the financial entity is automatically compared with thesecurities class action lawsuits in the second database, and anysecurities purchased or acquired by the financial entity during theclass period that are associated with an entered securities class actionlawsuit are identified. The identified securities may provide apotential monetary claim for the financial entity. A report is thenautomatically created of at least the lawsuits that may provide apotential monetary claim for the financial entity based on thetransaction activity of the financial entity. The report also includesestimated market loss and eligible loss information, as well as anyactions recommended to be taken by the financial entity regarding thelawsuits.

Brief Description of Drawings

[0010] The foregoing summary, as well as the following detaileddescription of the invention, will be better understood when read inconjunction with the appended drawings. For the purpose of illustratingthe invention, there are shown in the drawings embodiments which arepresently preferred. It should be understood, however, that theinvention is not limited to the precise arrangements andinstrumentalities shown.

[0011] In the drawings:

[0012] Figures 1-22 are screen shots and report printouts associatedwith one embodiment of the present invention, implemented as aweb-enabled service;

[0013] Figures 23-31 show additional reports that are available whenusing the system of the present invention;

[0014]Figure 32 is a database diagram of the report creation andaccessing;

[0015]Figure 33 shows a representation of transaction activity asobtained from the custodial records of a fictional financial entity.

[0016]Figure 34 is a schematic diagram of the custodial record retrievaland storage process.

[0017] Figures 35-39 show sample input screens for entering lawsuitsinto a database and for tracking client data;

[0018]Figure 40 shows the data associated with an estimated market losscalculation; and

[0019]Figure 41 shows the data associated with an eligible losscalculation.

Detailed Description

[0020] Certain terminology is used herein for convenience only and isnot to be taken as a limitation on the present invention. In thedrawings, the same reference letters are employed for designating thesame elements throughout the several figures.

[0021] 1. Overview of Present Invention

[0022] One preferred embodiment of the present invention is described inthe context of a service provided by Barrack, Rodos & Bacine,Philadelphia, Pennsylvania, a partnership including professionalcorporations. The service allows a financial entity to access varioustypes of static reports via the Internet by logging onto a website. Theservice updates the reports on a periodic basis to reflect the mostcurrent information pertaining to the financial entity and the status ofsecurities class action lawsuits tracked by the service. Preferably, theservice is provided to a plurality of financial entities or clients.("Financial entities" and clients are referred to interchangeablyherein.) Each financial entity has password protected access to receiveonly reports that pertain to their portfolio.

[0023] The financial entity may be any form of entity that has anidentifiable investment portfolio. Therefore, the financial entity maybe an investment company, a pension fund, a trust, an individualinvestor, or the like.

[0024] To generate the reports, the service performs the followingfunctions, each of which is described in detail below:

[0025] 1. Maintain a first database of transaction activity (e.g.,trading records) for a financial entity. The transaction activityincludes at least an identification of each security purchased oracquired, and the date of each purchase or acquisition.

[0026] 2. Maintain a second database of securities class actionlawsuits. The second database includes for each lawsuit at least anidentification of all securities associated with the class actionlawsuit, and the class period of the lawsuit.

[0027] 3. Compare the transaction activity of the financial entity withthe securities class action lawsuits in the second database.

[0028] 4. Identify any securities purchased or acquired by the financialentity during the class period that are associated with an enteredsecurities class action lawsuit. The identified securities may provide apotential monetary claim for the financial entity.

[0029] 5. Calculate an estimated market loss for each of the identifiedsecurities, and upon settlement of the respective lawsuit, calculate theeligible loss.

[0030] In one preferred embodiment of the present invention, fourdifferent types of reports are generated, as follows:

[0031] 1. Class Action Activity Filing Report (by company name or leadmotion due date). This report shows all lawsuits in the second database,including any lawsuits that do not provide a potential monetary claimfor the financial entity based on the transaction activity of thefinancial entity.

[0032] 2. Pending Class Action Monitor Report (by company name or leadmotion due date). This report shows only the lawsuits in the seconddatabase that provide a potential monetary claim for the financialentity based on the transaction activity of the financial entity.

[0033] 3. Pending Claims Administration Report (by case name or claimdeadline date). This report shows both the estimated loss and theeligible loss for the financial entity.

[0034] 4. Claims Recovery Report (by company name or recovery forwarddate). This report estimated loss, eligible loss, and the recoveryreceived.

[0035] 2. Detailed Disclosure

[0036] One important feature of the present invention is the ability topresent the reports described above to the financial entity. Toillustrate the report capabilities and report accessing process, asample instruction manual is provided below. In the sample, reports foran imaginary financial entity entitled "Nirvana Pension Fund" are shown.The reports are shown as screen shots and are also shown as they appearif printed out. The securities class action lawsuits shown in thereports are actual lawsuits. In the illustrated example, the client(Nirvana) accesses the reports via the Internet by using a browser tolog onto a web site.

[0037] I. INSTRUCTION MANUAL

[0038] How to Access Nirvana's Reports Through Barrack, Rodos & Bacine'sWeb Page.

[0039] 1. Go to www.barrack.com 2. Click on "Click here to enter mainsite", which is below opening graphic 3. Click on the "Institutionallog-on" button in the upper-right corner 4. A Network Password box, aspictured in Figure 1, will prompt you to enter your User Name andPassword information, which has been provided to you by Barrack, Rodos &Bacine ("BR&B") 5. You are now on the Barrack, Rodos & Bacine /Nirvana'sReport Links page (pictured in Figure 2)

[0040] Trade Status Terms Trade Status Terms Abbreviation DescriptionACT Activity during Class Period ACTFGN Activity/Foreign Shares OnlyACTFGNBNDS Activity/Bonds & Foreign Shares Only ACTPFT Activity/Profitduring Class Period BONDS Bonds Only DINC Data Incomplete D/N/A Data NotAvailable NACT No Activity during Class Period SRCHPEND Search PendingCALUR Calculation Under Review CHINPROG Chart In Progress

[0041] ii. Action Recommended Terms Action Recommended TermsAbbreviation Description FDA File Derivative Action FIA File IndividualAction INV Further Investigation Required LOCP Loss Outside of ClassPeriod/Possible Individual Action M Monitor MPS Monitor/PendingSettlement N None NCF None/Claim Filed NRR None/Recovery Received PCPossible Claim PLOCP Partial Loss Outside of Class Period/PossibleIndividual Action RL Recommended Lead RLM Recommended Lead/Moved RLARecommended Lead/Appointed UR Under Review

[0042]

[0043] This is How it Works: When BR&B receives notice that a securitiesclass action suit has been filed, BR&B searches your fund's transactioninformation for purchases of that particular stock during the reportedclass period. These reports will list the class actions that have beenfiled during a specific time period. For Nirvana, cases filed as earlyas (DATE) may be selected to be listed on this report. These reportswill list the cases that have been filed during a specific time periodlisting the transaction results from the search. These reports includecases that BR&B has searched on behalf of your fund, noting whether ornot it had activity during the class period or if the data is notavailable.

[0044] The following information is listed on this report: Lead MotionDue Date, Company/Case Name; Ticker; Cusip/ISIN; Class Begin Date; ClassEnd Date; Expanded Class Begin; Expanded Class End; Trade Status;Estimated Market Loss; Profit; Action Recommended (by BR&B).

[0045] How to Run The "Activity Filings" Reports: When you click on thereport name, a screen, pictured in Figure 3 is displayed.

[0046] "Start Date" - "End Date" boxes require dates. The dates that arebeing requested are the Case Filed dates. For example, you may want tosee the class action cases that were filed during the time period ofJanuary 1, 1998 through August 1, 2003 in which BR&B searched Nirvana'stransactional information. The dates should be entered as displayedabove. Click OK.

[0047] The report will appear on your screen as pictured in Figure 4.

[0048] You may: (a) view this entire report on the web; (b) print thereport; (c) download the report to an Excel spreadsheet; or (d) searchfor a particular item.

[0049] Search Feature: You may enter the name of any company, tickersymbol, cusip number in the search box field, and a window will bedisplayed with the search results.

[0050] To Print this Report: Select "Printer-Friendly" above and"Download". The Report will be displayed as pictured in Figure 5. ChooseFile and Print (remember that all reports should be printed in"landscape".) (Note: full printouts of the "Activity Filings" reportsare shown in Figure 6 and Figure 7.)

[0051] To Download to Excel: Choose the Excel option and "Download".

[0052] Client Reports Available via Barrack, Rodos & Bacine Web Site

[0053] There are four types of reports, each of which is sorted in twoways. To run any of the eight reports listed below, click on the reportname. Descriptions of these reports and how to use are described belowin sections A-D.

[0054] What is the (?): When you click on the (?) next to the name of areport, a brief description of that report is displayed.

[0055] A. Class Action Activity Filings Report (sorted By Lead MotionDue Date) and Class Action Activity Filings Report (sorted By Case Name)

[0056] What Are These Reports: These reports provide an overview ofsecurities class actions filed since (DATE). The report can be used todetermine whether Nirvana had a position in any given case. If therewere no transactions during a given class period, there is "noactivity", therefore Nirvana has no claim and no action is recommended.If, however, there are transactions during the relevant class period,calculations are made in order to determine whether Nirvana suffered aloss as a result. If Nirvana suffered a loss in a given case, that lossappears in the "Estimated Market Loss" column. Analysis is made as tothe appropriate action to take, which is listed in the "ActionRecommended column". When a loss has been suffered, the case alsoappears on the Class Action Monitor Report.

[0057] B. Pending Class Action Monitor Report (sorted By Lead Motion DueDate) and Pending Class Action Monitor Report (sorted By Case Name)

[0058] What Are These Reports: These reports serve as a monitoring toolto assist the Nirvana's board and staff in monitoring cases in whichNirvana has a loss position. When losses are incurred which exceedNirvana's thresholds for consideration of lead plaintiff status, BR&Bwill analyze the case and make a recommendation as to the appropriateaction, providing a copy of such analysis to Nirvana's General Counsel.As settlement notices occur in the future, such notices will bemonitored and appropriate action will be recommended. Typically, thecase will be moved to the Claims Administration Report. If, however, wedetermine the settlement is inappropriate in some way, other action(such as opting out or objecting) may be recommended.

[0059] No New Terms Appear on This Report.

[0060] This is How it Works: When BR&B receives notice that a securitiesclass action suit has been filed, BR&B searches your fund'stransactional information for its purchases in that particular stockduring the reported class period. This report will list only those classactions for which BR&B has performed a search for Nirvana and for whichNirvana has suffered a loss.

[0061] Listed on this report is the following information for each case:Lead Motion Due Date, Company/Case Name; Ticker; Cusip/ISIN; Class BeginDate; Class End Date; Expanded Class Begin; Expanded Class End; TradeStatus; Estimated Market Loss; Action Recommended (by BR&B).

[0062] How to Run The "Monitor Reports": When you click on the reportname, a screen, pictured in Figure 8, is displayed:

[0063] "Start Date" - "End Date" boxes require dates. The dates that arebeing requested are the Case Filed dates. For example, you may want tosee the class action cases that were filed during the time period ofJanuary 1, 1998 through August 1, 2003 in which BR&B searched Nirvana'stransactional information and Nirvana has suffered a loss. The datesshould be entered as displayed above. Click OK.

[0064] The report will appear on your screen as pictured in Figure 9.

[0065] You may: (a) view this entire report on the web; (b) print thereport; (c) download the report to an Excel spreadsheet; or (d) searchfor a particular item.

[0066] Search Feature: You may enter the name of any company, tickersymbol, cusip number in the search box field, and a window will bedisplayed with the search results.

[0067] To Print this Report: Select "Printer-Friendly" above and"Download". The Report will be displayed as pictured in Figure 10.Choose File and Print (remember that all reports should be printed in"landscape".) (Note: full printouts of the "Monitor" reports are shownin Figure 11 and Figure 12.)

[0068] To Download to Excel: Choose the Excel option and "Download".

[0069] C. Pending Claims Administration Report (sorted by claim filedeadline date) and Pending Claims Administration Report (sorted bycompany)

[0070] What Are These Reports: These reports monitor the status ofNirvana's securities class action claims in cases settled from (DATE)forward (in both passive cases and those in which Nirvana may choose totake a more active role). It is an excellent tool for Nirvana and itsBoard to insure that it is complying with its fiduciary duty to collectall claims to which it is entitled. Cases listed on this report includeboth those cases in which Nirvana suffered a loss during the classperiod and those cases in which Nirvana could potentially have a claim(if part of the class period precedes the data baseline, furtherinvestigation needs to be made prior to the claim filing deadline). Asnotice of recovery is received by BR&B from your custodial bank, thecase (and the amount received) will be moved from this report to theClaims Recovery Report. Terms - Claim Status Abbreviation Description CFClaim Field RR Recovery Received CLINV Client Investigation RequiredCUSTCF Custodian Filed Claim N/A Not Applicable NC No Claim Per Plan ofAllocation CFNR Claim Filed/Ineligible NCF No Claim on File TBF Claim ToBe Filed TBV Claim To Be Verified with Settlement Administrator

[0071]

[0072] This is How it Works: When a securities class action case issettled and settlement has been approved by the Court, BR&B willdetermine whether Nirvana has or may have suffered a loss in connectionwith the case. If Nirvana has suffered a loss in a settled case forwhich it may receive compensation, the case will appear on the PendingClaims Administration Report. Once a recovery has been received (andBR&B has been notified of the amount received) or it has been determinedthat Nirvana is not eligible to participate in the claims recovery forthe case, the case will be removed from this report.

[0073] Listed on this report is the following information for each case:Company/Case Name; Ticker; Cusip/ISIN; Class Begin Date; Class End Date;Claim Deadline Date; Claims Administrator; Date Claim Filed; ClaimStatus; Trade Status; Estimated Market Loss; Eligible Loss.

[0074] How to Run The "Claims Administration" Reports: When you click onthe report name, a screen, pictured in Figure 13, is displayed:

[0075] Click on "Continue to the report"

[0076] Special Note: The Claims Administration reports are NOT dategenerated reports. Settled cases in which Nirvana is eligible or may beeligible to receive a recovery will be displayed on this report. Once arecovery is received by Nirvana, and BR&B has been notified of receipt,that particular case will be moved to the Recovery Reports.

[0077] The report will appear on your screen as pictured in Figure 14.

[0078] You may: (a) view this entire report on the web; (b) print thereport; (c) download the report to an Excel spreadsheet; or (d) searchfor a particular item.

[0079] Search Feature: You may enter the name of any company, tickersymbol, cusip number in the search box field, and a window will bedisplayed with the search results.

[0080] To Print this Report: Select "Printer-Friendly" above and"Download". The Report will be displayed as pictured in Figure 15.Choose File and Print (remember that all reports should be printed in"landscape".) (Note: full printouts of the "Claims Administration"reports are shown in Figures 16 and 17.)

[0081] To Download to Excel: Choose the Excel option and "Download".

[0082] D. Claims Recovery Report (sorted Claim File Date) and ClaimsRecovery Report (sorted By Case Name)

[0083] What Are These Reports: These reports will list proceeds receivedby Nirvana per Nirvana's custodial information provided to BR&B.

[0084] This is How it Works: When BR&B has been notified that Nirvanahas received notice of a recovery check from a claims administratorrepresenting Nirvana's pro rata share of a settlement fund, (which wasthe result of a claim filed by your custodial bank) BR&B will keep trackof these recoveries received by date of recovery with the amount of eachrecovery.

[0085] Listed on this report is the following information for each case:Company/Case Name; Ticker; Cusip/ISIN; Claims Administrator; RecoveryForward Date; Recovery Amount Received; Estimated Market Loss; EligibleLoss.

[0086] How to Run The "Recovery" Reports: When you click on the reportname, a screen, pictured in Figure 18, is displayed.

[0087] "Start Date" - "End Date" boxes require dates. The dates that youare being prompted to enter are the Recovery Forward Dates. For example,you may want to see all recoveries that BR&B has recorded for Nirvanafor the time period of January 1, 2003 through August 1, 2003. The datesshould be entered as displayed above. Click OK.

[0088] The Report will appear on your screen as pictured on Figure 19.

[0089] You may: (a) view this entire report on the web; (b) print thereport; (c) download the report to an Excel spreadsheet; or (d) searchfor a particular item.

[0090] Search Feature: You may enter the name of any company, tickersymbol, cusip number in the search box field, and a window will bedisplayed with the search results.

[0091] To Print this Report: Select "Printer-Friendly" above and"Download". The Report will be displayed as pictured on Figure 20.Choose File and Print (remember that all reports should be printed in"landscape".) (Note: full printouts of the "Recovery" reports are shownon Figures 21 and 22.)

[0092] To Download to Excel: Choose the Excel option and "Download".

[0093] Note: The recovery information listed on the sample/draft ClaimsRecovery reports attached hereto contain claims recovery informationthat Nirvana and/or its custodial bank has furnished to BR&B.

[0094] END OF INSTRUCTION MANUAL

[0095]Figure 23 shows another example of an Activity Filings Report (allinclusive, by company) for a second client.

[0096] Figures 24-31 shows a full set of reports similar to those shownin Figures 6-7, 11-12, 16-17 and 21-22 for a third client.

[0097] To illustrate the feature wherein potential market losses areidentified, the Class Action Activity Filings Reports show adisproportionate percentage of lawsuits where the financial entity has apotential market loss. For a typical financial entity, most of theentries in this report would show a trade status of NACT (no activity),and thus no estimated market loss.

[0098] II. Description of Barrack Rodos & Bacine"s proprietary databaseand reporting system for the embodiment of the present inventiondescribed above.

[0099] 1. Platform

[0100] a. The platforms used in the Barrack Rodos & Bacine reportingsystem are: Windows NT/2000/XP, Microsoft SQL Server and MicrosoftInternet Information Server (IIS).

[0101] b. Programming languages are Transact-SQL, Perl, XML and XSLT.

[0102] 2. User authentication

[0103] a. Users (clients)

[0104] i. A user visits the site and is redirected to a login page. Theuser enters username and password, which is compared to information inthe database. If the user logs in correctly, the system creates asession ID in the database associated with the user, and stores a cookieon the user's browser containing the session id. Subsequent visitsduring this session are authenticated using this session id.

[0105] ii. Users are associated with clients in the database. The systemuses this relationship to determine what information to show a user.

[0106] iii. The user is taken to the reporting home page, which iscustomized for each client with a list of available reports relating tosecurities cases. The user selects a report and is asked to provide anyrequisite parameters (e.g. a range of dates for the report), and istaken to the report itself. The user can also choose to download thereport as a spreadsheet or view the report in a printable format. Sincethe user is associated with a given client in the database, he or shecan only view that client"s reports.

[0107] iv. Reports access the "transactions", "claim_file_dates","claim_stats" and "claims_admin" tables in the database. Each reportuses a unique client indentifier to identify information for aparticular client.

[0108] b. Users (Administrators)

[0109] i. An administrative user has the same login and sessionmaintenance as a client user. However, an administrative user is notassociated with a client, but rather is a member of an administrator'sgroup. As a member of this group, an administrator can view any client'sreports and can add and edit clients as well as add and edit users.

[0110] 3. Database diagram - See Figure 32.

[0111] 4. Computer code for report generation. The Appendix providessource code associated with the reports for the embodiment of thepresent invention described above.

[0112] The report generating software is periodically executed, such asonce every hour, so that the reports are current when accessed by theclients. The reports themselves are static information and are uploadedto a server site for 24 hour client access.

[0113] III. Creation and maintenance of a first database of transactionactivity for a financial entity

[0114] The reports of Figures 1-22 reflect the transaction activity ofthe Nirvana Pension Fund. Figure 33 shows a representation oftransaction activity as obtained from the custodial records of theNirvana Pension Fund. For illustration purposes only, the portfolio ofthis fund generally purchases a block of shares at the beginning of eachyear and sells the shares after five years. One exception is the sharesof Guidant Corporation which were purchased and sold within a six weekperiod.

[0115] The transaction activity correlates with the reports. Forexample, referring to Figures 6 and 33, Nirvana purchased 60,000 sharesof Regeneron Pharmaceuticals on January 2, 2003 and the class period forthe Regeneron lawsuit is for any purchase from March 28, 2000 to March30, 2003. Thus, Nirvana had an estimated market loss for this security.Nirvana had no transaction activity for Stellent, Inc. so the reportshows no estimated market loss for this record. Likewise, there were nolawsuits filed for Home Depot during the search dates of the report, sothere is no entry for Home Depot in the report even though Home Depotstock was purchased during the report period.

[0116] In one preferred embodiment of the present invention, the firstdatabase of transaction activity for a financial entity is obtained fromthe custodial records of each financial entity. The custodial recordsinclude trade data that allows a determination to be made as to whethera financial transaction falls within the class period for a givenlawsuit. The manner in which custodial records are accessed, stored,filtered and maintained will depend upon recordkeeping practices anddata storage formats of the custodian and the service provider (here,Barrack, Rodos & Bacine). Each custodian may store and download theircustodial data in a different format and may have a differentavailability of historical data (e.g., one month of data, one year ofdata). The service provider will typically need to develop and maintainits own database of transaction activity since custodians usually cannotprovide historical data for the financial entities, especially inimmediate downloadable electronic form. Thus, the service provider mayneed to log onto the custodial records once per month, download thelatest month of transaction data, and append it to its own database ofpast transaction data for the financial entity. In this manner, theservice provider will always have a full set of transaction data for thefinancial entity. Thus, if five years from now, a lawsuit is filed for aclass period that covers 2003, the service provider will already havethe transaction activity for 2003 in its database. If a custodial bankalways allows access to a complete historical database of transactionactivity, then it may not be necessary to perform the piecemealdownloading and appending process to build the database of historicaldata.

[0117] Custodians provide transactional data in unpredictable andinconsistent formats. Accordingly, data must be retrieved and converted(parsed) into a unified format and the converted data placed into acommon repository. The service provider uses the converted data todetermine, for any given security, the client's holdings through a rangeof dates, detailed information about each transaction in the subjectsecurity, and the client's losses on those transactions, if any, duringa specified time period.

[0118] Some custodial banks and their related websites that provideelectronic access to custodial records of a financial entity are listedbelow:

[0119] State Street Bank: In-Sight On-line System(https://www.iisonline.statestreet.com/)

[0120] Bank of New York: INFORM (https://inform.bankofny.com)

[0121] Northern Trust: (http://www.northerntrust.com/)

[0122] The process for logging into these password-protected sites,accessing and searching the custodial records, and downloading therecords is well-known and thus is not described further.

[0123]Figure 34 is a schematic diagram of the custodial record retrievaland storage process. The service provider communicates with eachcustodian using the appropriate communication protocol to obtain thelatest transaction activity and filters the data accordingly using aparsing engine or the like. In this example, two different financialentities are located at the same custodian 1. The filtered data is thenstored in historical databases for each financial entity.

[0124] Some custodial banks do not allow custodial records to beelectronically downloaded, but the custodial records can be printed out.Other banks may not even allow for electronic access to such records,but will provide periodic statements to their customers. For such banks,the printed records can be scanned into a database and filtered to beplaced in the standardized format necessary for storage in the databaseshown in Figure 34.

[0125] As discussed above, each custodial bank has a different log-inprocess. If the system is deployed for a large number of clients, thenthere will likely be a large number of custodial banks. To avoid thetime-consuming process of logging into each of the custodial bank,scripts are preferably written for each custodial bank so that thelog-in and record accessing process can be automated.

[0126] IV. Creation and maintenance of second database of securitiesclass action lawsuits

[0127] Many databases exist that contain securities class actionlawsuits. One publicly accessible database is the Index of Filingsmaintained by the Stanford Law School Securities Class ActionClearinghouse, in cooperation with Cornerstone Research. This databaseis accessible at the following website:http://securities.stanford.edu/companies.html. Any such database may beused as the second database of the present invention. In one preferredembodiment of the present invention described in the previous figures, aproprietary database is created and maintained using a semi-customizedcommercially available legal matter management system from LegalEdge™Software, Wayne, Pennsylvania. The software is also used for trackingclient data. Specifically, if a financial entity has a potentialmonetary claim, the software is used to store the information associatedwith the claim that is shown in the reports above (e.g., estimatedmarket loss, eligible loss, recovery received).

[0128] Figures 35-39 show sample input screens for entering the lawsuitsand tracking client data. Figures 36-39 show information for the CendantCorporation lawsuit that appears in the reports.

[0129] The Private Securities Litigation Reform Act (PSLRA) of 1995includes a notice provision that reads, in part, as follows:

[0130] Not later than 20 days after the date on which the complaint isfiled, the plaintiff or plaintiffs shall cause to be published, in awidely circulated national business-oriented publication or wireservice, a notice advising members of the purported plaintiff class -

[0131] (I) of the pendency of the action, the claims asserted therein,and the purported class period; and

[0132] (II) that, not later than 60 days after the date on which thenotice is published, any member of the purported class may move thecourt to serve as lead plaintiff of the purported class.

[0133] These notices are thus readily available from a wide variety ofelectronic media sources and can be located almost immediately on adaily basis. For example, a daily search on Yahoo Advanced News usingkey words that typically appear in such notices can be run to locate thelawsuits. Newspapers such as the New York Times, USA Today andInvestor's Business Daily can also be monitored for such notices.Settlements notices are also posted in these sources. Once a new lawsuitis identified or a status change of existing lawsuit is identified(e.g., change in class period, settlement announcement), then the seconddatabase (here, the LegalEdge database) must be updated accordingly.

[0134] V. Estimated Market Loss Calculation

[0135] If a potential monetary claim is identified for a financialentity based on a newly entered lawsuit, then an estimated market losscalculation is performed. The result is entered into the Transactionswindow of LegalEdge, as shown in Figure 38.

[0136] One method of calculating the estimated market loss is the"first-in/first-out" (FIFO) method as described below:

[0137] i. Background

[0138] Plaintiffs in securities class action lawsuits are required tosign a Certification which includes a listing of all purchases and salesof securities of the named defendant company during the stated ClassPeriod. For each purchase or sale, the trade date, number of shares, andprice per shares are listed. Under the law, it is the actual price paidor received that must be used and not an "average" price and only sharespurchased during the class period are allowed to obtain recovery. Tocompute the loss for shares purchased in the Class Period, generallyspeaking, sale proceeds from shares purchased during the period aresubtracted from the cost of those shares and the "retained value" issubtracted from the purchase price of shares purchased and retainedduring the class period. The "retained value" is the average of theclosing prices for the 90 day period following the end of the ClassPeriod (15 U.S.C. §78u-4(e)).

[0139] ii. "FIFO" Method

[0140] To precisely compute the loss for shares sold during the classperiod, it is necessary to match each share sold with a prior purchase.As it is generally impractical to search for the actual stockcertificate numbers connected with each purchase and sale - particularlywhen dealing with the volume of transactions typical of an institutionseeking to serve as lead plaintiff-courts have generally recognized the"first-in, first-out" accounting method to match class period sales toprior purchases and calculate loss. The first-in, first-out, or "FIFO"method, assumes that the earliest acquired shares are sold first. Noloss or gain is computed on shares purchased before the class periodeven if the shares are sold in the class period, because the law onlypermits calculations of gain or losses for those shares purchased in theclass period. Thus, shares sold during the class period are firstmatched to the "prior balance" of shares purchased prior to the classperiod.

[0141] iii. Examples

[0142] The class period of the lawsuit is February 1, 2000 through andincluding August 4, 2000. The transaction records indicate that theinvestment fund of the client purchased 2000 shares of XYZ company onMarch 2, 2000 at $100/share and sold those same shares on May 29, 2000at $50/share. One-half of the initial investment has been lost, as shownon the chart in Figure 40.

[0143] However, if the fund had a beginning balance on February 1, 2000of 100,000 shares, then the above 2000 shares sold would not be matchedagainst the 2000 shares purchased on March 2, 2000, but would be matchedagainst the beginning balance of 100,000 shares. If the stock continuedto decline to a retained value of $20.00 at the end of the class period,the loss would be $160,000, as shown on the chart in Figure 41.

[0144] The estimated market loss calculation may be manually calculatedor may be automatically calculated based on preprogrammed algorithms. Ineither instance, it is preferable to use a spreadsheet for thecalculation, such as an Excel spreadsheet. In one preferred embodimentof the present invention, a link is provided on the reports shown inFigures 5, 10, 15 and 20 which allows the client to access and view thespreadsheet. The link is not shown in these figures, but is preferablyprovided adjacent to each estimated market loss value.

[0145] VI. Eligible Loss Calculation

[0146] If or when a lawsuit settles for which an estimated loss valueexists, then an eligible loss calculation is performed. The result isentered into the Transactions window of LegalEdge, as shown in Figure38.

[0147] The eligible loss is determined using the formulas contained inthe Plan of Allocation, developed by experts hired by plaintiffs'counsel in a securities class action and are unique to the class actionin question. The formulas, which differ for each securities class actionare completely out of the control of the claimants in that action(although class members can and sometimes do object to a Plan ofAllocation before a court gives final approval to the settlement andallocation).

[0148] In the Cendant case, the Nirvana Pension Fund purchased 70,000shares of CUC Corp. (the predecessor to Cendant) on 1/2/96 at $23.00 pershare & sold those shares on 12/31/01 at $19.61 per share, as shown inFigure 33.

[0149] Nirvana's eligible loss for Cendant is calculated as follows:

[0150] In accordance with the Plan of Allocation approved by the Courtand described in detail in the Notice of Settlement of Class Actionissued at the direction of the Court on April 7, 2000, for CUC sharespurchased between May 31, 1995 and August 28, 1998, that were still heldas of August 28, 1998, the Loss Amount is the per share amount indicatedin Table A attached to the Plan of Allocation for the date that sharewas purchased. The Loss Amount for January 2, 1996 is $2.47. Thus,Nirvana's eligible loss is 70,000 x $2.47 or $172,900.

[0151] The eligible loss calculation may be manually calculated or maybe automatically calculated based on preprogrammed algorithms. In eitherinstance, it is preferable to use a spreadsheet for the calculation,such as an Excel spreadsheet. In one preferred embodiment of the presentinvention, a link is provided on the reports shown in Figures 15 and 20which allows the client to access and view the spreadsheet. The link isnot shown in these figures, but is preferably provided adjacent to eachestimated market loss value.

[0152] VII. Additional Disclosure

[0153] The present invention may be implemented in a variety ofdifferent ways. In the embodiment of the invention described above, theservice provider maintains historical transaction data for a pluralityof financial entities and is provided access to new transaction data.Likewise, a second database of lawsuits is maintained. Whenever any newlawsuits are added to the second database or if the record for a lawsuitalready existing in the database is modified or updated (such as bychanging the class period), the transaction activity for each financialentity is reviewed to identify any securities purchased or acquired byeach financial entity that are associated with the securities classaction lawsuit and which may provide a potential monetary claim for therespective financial entity. If a settlement is announced in a lawsuitthat exists in the database, eligible loss calculations areautomatically or manually performed for all estimated loss entries.

[0154] If a new financial entity (client) is added to the system, therewill be an agreement between the client and the service providerregarding how far back in time the transaction activity will be checked.This will depend upon the availability of the transaction records andother practical considerations. Initially, all of the transactionactivity will be checked against every lawsuit in the second database.Thereafter, only new or modified lawsuit records will need to bechecked.

[0155] In an alternative embodiment of the invention, the report moduleis not necessarily used. Instead, the following steps are performed:

[0156] 1. A database of transaction activity is accessed for one or morefinancial entities. The transaction activity includes for each financialentity, an identification of each security purchased or acquired; andthe date of each purchase or acquisition.

[0157] 2. A database of a plurality of securities class action lawsuitsis accessed. The database includes for each lawsuit an identification ofall securities associated with the class action lawsuit, and the classperiod of the lawsuit.

[0158] 3. The transaction activity of the one or more financial entitiesis automatically compared with the database of the securities classaction lawsuit.

[0159] 4. Any securities purchased or acquired by each financial entityduring the class period that are associated with a securities classaction lawsuit are identified. The identified securities may provide apotential monetary claim for the respective financial entity.

[0160] This alternative embodiment may be used for a financial entitythat may not wish to subscribe to a service that can provide up-to-datereports and follow-up monitoring of relevant lawsuits. Such a financialentity may upload its own trading records if no automated custodial bankaccess can be facilitated or if no custodial records are readilyavailable. The financial entity may receive a report of any potentiallyrelevant lawsuits, but no permanent, retrievable report records will beestablished or maintained at the service provider for the financialentity.

[0161] The volume of data in the system (both transaction records andlawsuits), the speed of the system computers, and other practicalconsiderations will determine how frequently and how thoroughlycomparisons are done between transaction records and lawsuit records.Notwithstanding these factors, the searches are always redone if theclass period of a previously entered lawsuit changes. This typicallyoccurs upon settlement when the class period is often narrowed. If nochanges are made to the class period or settlement status of aparticular lawsuit, then it is typically not necessary to rerun a searchof the security associated with the lawsuit against the transactionactivity of a financial entity because no new reportable informationwould be identified. That is, if new transaction activity is added forthe financial entity, then it is not likely that the new activity wouldresult in an estimated market loss since the class period for thelawsuit would always be a time period prior to the new transactionactivity.

[0162] To select the appropriate "Action Recommended" terms for entryinto the reports, it is typically necessary for a technical expert suchas a securities class action attorney an/or an accountant to manuallyanalyze the client's holdings with respect to the claims made in thelawsuit and the total securities holdings of the company subject to thelawsuit. However, some selected actions can be automatically determinedbased on preprogrammed algorithms. For example, the PSLRA includes apresumption that the lead counsel may be the person who "has the largestfinancial interest in the relief sought by the class". If the eligibleclass members of a lawsuit are those who purchased stock during theclass period, then an initial recommendation can be made byautomatically determining what percentage of the company's total stockwas purchased by the financial entity during the class period. If thepercentage is greater than a predetermined value, then lead counsel maybe recommended. Alternatively, if the percentage is less than apredetermined value, the action of only monitoring the case may berecommended. If the percentage is extremely low, the action recommendedmay be automatically selected to be "none". Estimated loss valuethresholds may also be used to automatically select theserecommendations.

[0163] The present invention allows a financial entity to more easilyfulfill its fiduciary duty to evaluate its position with respect to anygiven securities class action lawsuit, and track any identifiedpotential market loss through the conclusion of a lawsuit. The allinclusive Class Action Activity Filing Report is particularly helpfulsince a financial entity can quickly respond to inquiries as to whetherthe financial entity has a potential market loss with respect to anyparticular lawsuit. The Pending Class Action Monitor Report isparticularly useful in that it allows a financial entity to get acomprehensive overview of only the lawsuits that provide a potentialmonetary claim, as well as the estimated market loss. This allows thefinancial entity to quickly determine which lawsuits to focus attentionon, especially if an active role in the lawsuit is recommended.

[0164] The present invention may be implemented with any combination ofhardware and software. If implemented as a computer-implementedapparatus, the present invention is implemented using means forperforming all of the steps and functions described above.

[0165] The present invention can be included in an article ofmanufacture (e.g., one or more computer program products) having, forinstance, computer useable media. The media has embodied therein, forinstance, computer readable program code means for providing andfacilitating the mechanisms of the present invention. The article ofmanufacture can be included as part of a computer system or soldseparately.

[0166] It will be appreciated by those skilled in the art that changescould be made to the embodiments described above without departing fromthe broad inventive concept thereof. It is understood, therefore, thatthis invention is not limited to the particular embodiments disclosed,but it is intended to cover modifications within the spirit and scope ofthe present invention.

[0167] It will be appreciated by those skilled in the art that changescould be made to the embodiments described above without departing fromthe broad inventive concept thereof. It is understood, therefore, thatthis invention is not limited to the particular embodiments disclosed,but it is intended to cover modifications within the spirit and scope ofthe present invention as defined by the appended claims.

[0168] We claim:

What is Claimed is:
 1. A computer-implemented method of automaticallycreating reports related to potential monetary claims resulting fromsecurities class action lawsuits for securities purchased or acquired byone or more financial entities, the method comprising, for eachfinancial entity: (a) accessing a first database of transaction activityfor a financial entity, the transaction activity including: (i) anidentification of each security purchased or acquired, and (ii) the dateof each purchase, sale and acquisition; (b) accessing a second databaseof securities class action lawsuits, the second database includingpending securities class action lawsuits, the second database includingfor each lawsuit: (i) an identification of all securities associatedwith the class action lawsuit, and (ii) the class period of the lawsuit;(c) automatically comparing in a computer the transaction activity ofthe financial entity with the securities class action lawsuits in thesecond database; (d) identifying any securities purchased or acquired bythe financial entity during the class period that are associated with anentered securities class action lawsuit, wherein the identifiedsecurities may provide a potential monetary claim for the financialentity; and (e) automatically creating a report of at least the lawsuitsthat may provide a potential monetary claim for the financial entitybased on the transaction activity of the financial entity.
 2. The methodof claim 1 wherein step (d) further comprises identifying any securitiesthat were purchased or acquired by the financial entity during the classperiod, the method further comprising: (f) calculating an estimatedmarket loss for each security that was identified as being purchased oracquired by the financial entity during the class period, the reportincluding the estimated market loss values.
 3. The method of claim 2further comprising: (g) upon settlement of a lawsuit, calculating aneligible loss for each security that has an estimated market loss value.4. The method of claim 3 wherein a calculation is performed to determinethe eligible loss to the financial entity, the method furthercomprising: (g) entering the calculation result into a spreadsheet; (h)storing the spreadsheet in a retrievable file; and (i) accessing thespreadsheet while viewing the report.
 5. The method of claim 2 wherein acalculation is performed to determine the estimated market loss to thefinancial entity, the method further comprising: (g) entering thecalculation result into a spreadsheet; (h) storing the spreadsheet in aretrievable file; and (i) accessing the spreadsheet while viewing thereport.
 6. The method of claim 1 further comprising: (f) entering thesecurities class action lawsuits into the second database andperiodically updating the second database of securities class actionlawsuits with newly filed unsettled lawsuits, and repeating steps (c)and (d) after each update for the newly filed lawsuits, the reportstherefore automatically including the newly filed unsettled lawsuitsthat may provide a potential monetary claim for the financial entitybased on the transaction activity of the financial entity.
 7. The methodof claim 6 further comprising: (f) monitoring statutorily requiredpublic notices of newly filed securities class action lawsuits, whereinthe lawsuits in the second database are entered immediately uponidentifying any such newly filed lawsuits.
 8. The method of claim 1wherein the lawsuits in the report include all lawsuits in the seconddatabase, including any lawsuits that do not provide a potentialmonetary claim for the financial entity based on the transactionactivity of the financial entity.
 9. The method of claim 1 furthercomprising: (f) accessing custodial records of the financial entity toobtain the transaction activity for the financial entity and populatingthe first database with the transaction activity.
 10. Acomputer-implemented method of automatically identifying potentialmonetary claims resulting from securities class action lawsuits, themethod comprising: (a) accessing a first database of transactionactivity for one or more financial entities, the transaction activityincluding for each financial entity: (i) an identification of eachsecurity purchased or acquired, and (ii) the date of each purchase oracquisition; (b) accessing a second database of a plurality ofsecurities class action lawsuits, the second database including pendingsecurities class action lawsuits, the second database including for eachlawsuit: (i) an identification of all securities associated with theclass action lawsuit, and (ii) the class period of the lawsuit; (c)automatically comparing in a computer the transaction activity of theone or more financial entities with the securities class actionlawsuits; and (d) identifying any securities purchased or acquired byeach financial entity that are associated with a securities class actionlawsuit, wherein the identified securities may provide a potentialmonetary claim for the respective financial entity.
 11. The method ofclaim 10 wherein step (d) further comprises identifying any securitiespurchased or acquired by each financial entity during the class periodthat are associated with a securities class action lawsuit, wherein theidentified securities may provide a potential monetary claim for therespective financial entity.
 12. The method of claim 11 wherein step (a)is performed by accessing custodial records of the one or more financialentities.
 13. An article of manufacture for automatically creatingreports related to potential monetary claims resulting from securitiesclass action lawsuits for securities purchased or acquired by one ormore financial entities, the article of manufacture comprising acomputer-readable medium holding computer-executable instructions forperforming a method comprising, for each financial entity: (a) accessinga first database of transaction activity for a financial entity, thetransaction activity including: (i) an identification of each securitypurchased or acquired, and (ii) the date of each purchase, sale andacquisition; (b) accessing a second database of securities class actionlawsuits, the second database including pending securities class actionlawsuits, the second database including for each lawsuit: (i) anidentification of all securities associated with the class actionlawsuit, and (ii) the class period of the lawsuit; (c) automaticallycomparing in a computer the transaction activity of the financial entitywith the securities class action lawsuits in the second database; (d)identifying any securities purchased or acquired by the financial entityduring the class period that are associated with an entered securitiesclass action lawsuit, wherein the identified securities may provide apotential monetary claim for the financial entity; and (e) automaticallycreating a report of at least the lawsuits that may provide a potentialmonetary claim for the financial entity based on the transactionactivity of the financial entity.
 14. The article of manufacture ofclaim 13 wherein step (d) further comprises identifying any securitiesthat were purchased or acquired by the financial entity during the classperiod, and the computer-executable instructions perform a methodfurther comprising: (f) calculating an estimated market loss for eachsecurity that was identified as being purchased or acquired by thefinancial entity during the class period, the report including theestimated market loss values.
 15. The article of manufacture of claim 14wherein the computer-executable instructions perform a method furthercomprising: (g) upon settlement of a lawsuit, calculating an eligibleloss for each security that has an estimated market loss value.
 16. Thearticle of manufacture of claim 15 wherein a calculation is performed todetermine the eligible loss to the financial entity, and thecomputer-executable instructions perform a method further comprising:(g) entering the calculation result into a spreadsheet; (h) storing thespreadsheet in a retrievable file; and (i) accessing the spreadsheetwhile viewing the report.
 17. The article of manufacture of claim 14wherein a calculation is performed to determine the estimated marketloss to the financial entity, and the computer-executable instructionsperform a method further comprising: (g) entering the calculation resultinto a spreadsheet; (h) storing the spreadsheet in a retrievable file;and (i) accessing the spreadsheet while viewing the report.
 18. Thearticle of manufacture of claim 13 wherein the computer-executableinstructions perform a method further comprising: (f) entering thesecurities class action lawsuits into the second database andperiodically updating the second database of securities class actionlawsuits with newly filed unsettled lawsuits, and repeating steps (c)and (d) after each update for the newly filed lawsuits, the reportstherefore automatically including the newly filed unsettled lawsuitsthat may provide a potential monetary claim for the financial entitybased on the transaction activity of the financial entity.
 19. Thearticle of manufacture of claim 18 wherein the computer-executableinstructions perform a method further comprising: (f) monitoringstatutorily required public notices of newly filed securities classaction lawsuits, wherein the lawsuits in the second database are enteredimmediately upon identifying any such newly filed lawsuits.
 20. Thearticle of manufacture of claim 13 wherein the lawsuits in the reportinclude all lawsuits in the second database, including any lawsuits thatdo not provide a potential monetary claim for the financial entity basedon the transaction activity of the financial entity.
 21. The article ofmanufacture of claim 13 wherein the computer-executable instructionsperform a method further comprising: (f) accessing custodial records ofthe financial entity to obtain the transaction activity for thefinancial entity and populating the first database with the transactionactivity.
 22. An article of manufacture for automatically identifyingpotential monetary claims resulting from securities class actionlawsuits, the article of manufacture comprising a computer-readablemedium holding computer-executable instructions for performing a methodcomprising: (a) accessing a first database of transaction activity forone or more financial entities, the transaction activity including foreach financial entity: (i) an identification of each security purchasedor acquired, and (ii) the date of each purchase or acquisition; (b)accessing a second database of a plurality of securities class actionlawsuits, the second database including pending securities class actionlawsuits, the second database including for each lawsuit: (i) anidentification of all securities associated with the class actionlawsuit, and (ii) the class period of the lawsuit; (c) automaticallycomparing in a computer the transaction activity of the one or morefinancial entities with the securities class action lawsuits; and (d)identifying any securities purchased or acquired by each financialentity that are associated with a securities class action lawsuit,wherein the identified securities may provide a potential monetary claimfor the respective financial entity.
 23. The article of manufacture ofclaim 22 wherein step (d) further comprises identifying any securitiespurchased or acquired by each financial entity during the class periodthat are associated with a securities class action lawsuit, wherein theidentified securities may provide a potential monetary claim for therespective financial entity.
 24. The article of manufacture of claim 23wherein step (a) is performed by accessing custodial records of the oneor more financial entities.